Interest rates have remained consistent to slightly moving upward for many weeks. On Monday morning the mortgage backed security market was trading down (-21 bps), pushing rates higher again.

Finally a break through took place triggering a dramatic turnaround. The Italian parliament elections revealed no clear winner. The stock market plummeted and investors sought security in bonds and mortgage backed securities.

The MBS market ended up closing up (+ 56 bps), the largest single day improvement since early January.

Interest rates hit their lowest levels in over a month.

Stay tuned as increased volatility in the market is likely with over 85 billion in spending cuts scheduled to take place on Friday if a deal is not made. Have a great week!!